The Knight Frank Luxury Investment Index is the benchmark index for assessing the performance of alternative investments. For the past 10 years, bottles of rare whisky have topped the list with a price change of 280%, nearly double the performance of the S&P 500 and fine wine, the closest comparator in the alternatives space.
Meanwhile, according to the Whisky Cask Market Report, whisky casks have generated an average return of 12.4% per annum over the past five years, with popular distilleries delivering even greater advances.
According to The Scotch Whisky Association (SWA), global export figures for 2022, termed a “bumper” year, saw a slight decrease as global markets recovered from the pandemic. However, there remains cause for optimism. Compared to 2019, Scotch Whisky exports experienced a substantial 14% increase in value and a 3% growth in volume.
The whisky market has made a remarkable comeback in recent decades, with distilleries starting up worldwide. Today, the global whisky market is worth close to $70bn and forecast to hit $125bn by 2032, according to KPMG. Countries such as Japan and India are joining traditional products such as Scotch and Irish Whisk(e)y.
The growing global interest in whisky has sparked a gold rush. A KPMG survey of 200 high-net-worth individuals and investment advisors found that whisky was the most desired alternative investment class, with two-thirds of respondents favouring Scotch Whisky.
Tax benefits
Individuals cited tax efficiency for the preference of casks over individual bottles. In the UK, alcohol duty must be paid on alcohol when it is bottled and leaves “bond.” The amount of duty paid varies from product to product, but for the average bottle of Scotch Whisky, a little over £10 is paid in alcohol duty. Storing the whisky in casks in so-called bonded warehouses gets around this issue. What's more, any profits earned from the sale of a cask are generally capital gains exempt because the product is classified as what's known as a “wasting asset.”
There are plenty of benefits to including whisky in your portfolio. However, investing in the market with a trusted partner makes sense. Investing in whisky, particularly whisky casks, takes a lot of work. Unless you've got millions of pounds in assets and your own bonded warehouse, it’s going to be a struggle to acquire a diverse portfolio to achieve the tax and capital growth benefits.
Marketplace like no other
The technology the company have built is made to revolutionise the industry of both wine and whisky collecting and investing, the marketplace offers a comprehensive dashboard for your collection, enabling you to view your entire collection in one place. Regardless of whether you have purchased through their platform, you will be able to store your collection data here. The marketplace provides a secure way to trade wine and spirits securely with authenticity guaranteed and fully insured.
Decant index is available for collectors or investors to purchase one bottle of spirit or wine or multiple casks of Whisky or Rum, their marketplace lists over 1,000 products from more than 100 different producers.
The company are more than just tech business, they have invested heavily in their Mayfair office, creating a contemporary House Lounge Bar and a separate tasting suite designed for client events. Their office is available to all their private clients and is often the meeting place for private client team and their clients.
Decant Index, offers each collector a dedicated private client director to help support their needs.
Decant Index, part of Decant Group, has a number of businesses within the alcohol sector, one of which is a dedicated storage facility in Scotland, this storage facility is a dedicated bonded warehouse where clients are able to store casks.
When the purchase is completed, the casks are stored at their secure HMRC government-bonded warehouse, fully insured (subject to policy exclusions, terms and conditions) and tax-free. All documentation is held within the online portal. Investors can then sit on the investment and wait for it to mature as long as they wish - three years is the minimum requirement for whisky to be called Scotch Whisky.
Decant Index handles the buying and storing process and can help with the selling process. When it is time to sell, investors can choose from one of several options: selling through the platform to other partners and collectors, independent bottlers, or going to auction. If none of those options work out, investors can always sell directly back to Decant Index as a dedicated stockist for a fast turnaround.
To learn more about Decant index, download their free app or create a free account at: https://decantindex.com/.
